As the world of work becomes increasingly flexible, models such as ‘workations’ are coming more into focus. Companies are increasingly using such schemes as a tool for recruiting and retaining staff. At the same time, workations raise a number of legal issues that require careful consideration.

Definition and legal classification

There is no uniform legal definition of the term ‘workation’. It is often understood to mean performing work at a freely chosen location, frequently abroad, combined with a private or leisure-related stay at that location.

A clear conceptual definition within the company is therefore essential to avoid misinterpretations! Before introducing a workation scheme, companies should clearly define what is meant by ‘workation’ within their specific organisation – the variations are wide-ranging, from ‘half-day work, half-day holiday’ to ‘work Monday to Friday, holiday from Saturday’ or, more riskily, ‘we’ll see how it goes, a mix of work and holiday’.

Legally, a workation is most likely to be classified in practice as a special form of (cross-border) telework.

Legal framework

Workations are subject (in particular, but not exclusively) to provisions under labour law, social security law, tax law and data protection law. Furthermore, mandatory labour law provisions of the host country may apply (e.g. working time regulations or public holiday provisions), which must be observed regardless of the contractual choice of law.

In addition to numerous formal requirements, practical challenges also arise, such as limited supervisory options for the employer, potential data protection risks, organisational difficulties due to time differences, and the risk of an unclear distinction between working hours and leisure time.

Furthermore, workation is not equally suitable for all activities or roles and generally requires a high degree of self-organisation.

The need for internal regulations

Against this background, companies are advised to adopt a structured and legally compliant approach to planning, implementation and organisation. In practice, this is often achieved by implementing an internal workation policy, supplemented by individual agreements. A written individual agreement on workation is recommended and, depending on the terms, may even be mandatory.

The following aspects, among others, should be regulated:

• Definition of terms and scope,
• timeframe and prerequisites,
• location,
• working hours and availability,
• provision of work equipment and cost issues,
• data protection and confidentiality,
• rights to terminate or recall,
• issues of applicable law and jurisdiction.

Conclusion

Workation represents an attractive yet legally complex model. Without appropriate contractual and organisational arrangements, significant risks may arise for companies. Companies are therefore well advised to carefully examine the legal framework in each individual case and to offer workable yet legally compliant solutions.

The employment law team at KWR will be happy to assist you with any questions regarding teleworking and workation.